Most people know the late Kay Thompson only as the author of the Eloise children's books. But she was also a singer, an actress, a vocal coach -- and Liza Minnelli's godmother.

Minnelli will pay tribute to Thompson in her new show "Liza's At the Palace .," which will run at the Palace Theatre in New York Wednesday through Dec. 28. The first half of the show will be devoted to hits like "Cabaret" and "New York, New York," plus a few new songs. The second half will re-create the Thompson nightclub act Minnelli saw as a child at Ciro's in West Hollywood.

"I was sitting on my mom's lap, across from my father, and I just remember her feet flying around and how exciting it was," says Minnelli, 62, in a phone interview from a tour stop in Florence, Italy.

Thompson worked as a vocal arranger with Minnelli's mother, Judy Garland, on movies such as "Ziegfeld Follies" and "The Pirate." She remained close to Minnelli throughout her life. She was living in Minnelli's New York penthouse when she died in 1998.

"The greatest gift my parents ever gave me, really, was to make her my godmother," Minnelli says. "She had a point of view and a style and a way of singing . She was cerebral and harmonious. And she was funny. And she was great with kids. She was so interesting, always, to me when I was little.

"She'd say these wonderful things . she'd look up at the sky, and there'd be a crescent moon, just this silvery slip of a moon, and she'd say, 'Oh look, Liza, God is paring his toenails.'"

She says Thompson "taught me a really fundamental curiosity about life, and that curiosity has stayed with me."

Her voices brims with pride as she reels off Thompson's accomplishments.

"She was the head of the music department at MGM. In the late '30s, for a woman to be the head of anything was amazing, you know. Then she did all kinds of things. She wrote. She was in 'Funny Face.' She did this marvelous nightclub act. And she never did anything too long. She would say, 'Uh, I've had enough. I think I'll do something else.'"

Some have said that the Eloise character -- a mischievous, prematurely worldly 6-year-old who lives at the Plaza Hotel -- was inspired by the young Minnelli.

Minnelli believes that might be partially true, even though Thompson once said "Eloise is me. All me."

Minnelli has recorded studio versions of Thompson's songs with veteran producer Phil Ramone, who will record the Palace show, too. The studio recordings, the live recordings or some combination of the two will make up Minnelli's next album, she says.

"Liza's At the Palace ." will feature a 12-member orchestra and four singer-dancers. It will help fill the gap at the Palace Theatre between the October closing of "Legally Blonde" and a revival of "West Side Story" that begins previews in February.

Minnelli's own history with the Palace goes back to the '50s, when she saw her mother and other stars perform there.

"Oh, I love the Palace," she says. "I remember going and seeing so many shows there. You know, not only my family, but everybody: Marlene Dietrich and all these wonderful people. And all these shows, like 'Sweet Charity.' It's just legendary."